stablecoinnews

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‎The Bank of England (BoE) has officially published its final policy draft for systemic sterling-denominated stablecoins. In a massive win for the digital asset industry, the central bank dialed back several of its most controversial restrictions to prevent UK-based capital from fleeing offshore.
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‎Here are the 5 critical points that every crypto trader and investor needs to know about the updated framework:
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‎1. Scraping Individual Wallet Holding Caps
‎The BoE completely abandoned its highly criticized plan to impose strict holding limits on individual and corporate users. The original proposal sought to restrict retail users to a tight limit of £20,000 to prevent sudden capital flight from traditional commercial banks. Under the new policy, everyday users and institutional investors will face no individual transaction or balance restrictions, opening the door for massive retail and corporate adoption.
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‎2. Implementation of a £40 Billion Issuance Limit
‎Instead of capping user wallets, the central bank shifted its focus toward macro-prudential risk management by introducing a temporary aggregate limit of £40 billion ($52.8 billion) per systemic stablecoin issuer. This change targets financial stability at scale rather than restricting individual user freedom. The BoE explicitly noted that this guardrail is temporary and will be phased out as the sterling stablecoin market stabilizes and matures.
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‎3. Sweeter Yield Terms via Backing Assets
‎A major pain point for crypto companies was the strict reserve model, which threatened the profitability of operating a UK stablecoin. The final rules slightly ease the reserve composition requirements:
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· ‎Issuers can now hold up to 70% of backing assets in short-term UK government debt, up from the previously proposed 60%.
· ‎The remaining 30% must stay in non-interest-bearing deposits at the central bank.
· ‎While stablecoin issuers benefit from the extra government bond yield, they are still banned from passing interest payments directly to coin holders.
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‎4. Navigating Strong Global Regulatory Pressure
‎The decision to soften these rules was heavily driven by industry pushback and fears of falling behind rival jurisdictions. Critics pointed out that even with these adjustments, the UK remains one of the world's more conservative stablecoin regimes—particularly compared to the EU's newly active MiCA regime and the crypto-friendly environment in the US. The policy shift ensures that sterling-backed tokens remain economically viable alongside dominant US dollar rivals.
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‎5. Clear Runway for a 2027 Market Launch
‎The BoE has opened a final feedback window closing on September 22, with plans to officially finalize the stablecoin legal framework by the end of 2026. This timeline sets the stage for fully regulated UK stablecoins to go live in early 2027. This rollout is designed to sync directly with broader UK crypto legislation covering custody, staking, and retail access.
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